I sent the following letter to members of Provo's Municipal Council on June 2, 2008.
Greetings Members of the Council;
I apologize for the last-minute nature of this communication. I've been waiting to collect as much information as possible before I e-mail you important information on why Broadweave is the wrong company to sell iProvo to.
Certainly basic honesty seems to be an issue with Broadweave. As of May 15, they have neglected to obtain business licenses in any municipality where they do business. Washington City has considered referring the matter to enforcement. (See: http://www.freeutopia.org/2008/05/15/broadweave-lacks-proper-business-licenses-corporation-filings/) They also have repeatedly misrepresented their company's age, claiming to have existed since 1999, yet nothing shows that the company existed prior to 2003. In an interview today, Steve Christensen, Broadweave's CEO, is now claiming the company has been around since 2003. Why the lie? (See: http://www.freeutopia.org/2008/05/16/broadweave-did-not-exist-prior-to-2003-website-claims-first-contract-in-1999/
and http://www.freeutopia.org/2008/06/02/broadweave-doubletalks-iprovo-on-couchcast/) They have also talked up the importance of equipment ownership and the poor value of open networks while failing to practice what they preach. (See: http://www.freeutopia.org/2008/05/19/broadweaves-double-talk-on-open-networks/ and http://www.freeutopia.org/2008/05/20/broadweaves-double-talk-on-equipment-ownership/) It is even rumored that they have tax liens filed against them by the state for failure to pay their withholding taxes for November and December of 2007. (See: http://www.freeutopia.org/2008/05/16/evaluating-the-iprovo-asset-purchase-agreement/#comment-4887) Can you really trust a company that shows so many signs of being untrustworthy?
This says nothing of their expansion plans either. The Eagle Broadband network they have purchased in Houston was a seriously distressed asset. In order to make it usable, they need to build a NOC, negotiation franchise agreements and transport rights and replace some vital missing equipment. They also need to overcome a negative consumer perception. At the time that OEN, the previous network operator, went out of business, there were 1500 customers, all of whom lost their service with zero notice. That kind of poor experience means they will be plowing millions upon millions into a network with a strongly negative customer perception. This says nothing of their attempt to pursue developments in Nevada, Arizona, New Mexico and California, pursuits that will require even more money that they do not have.
So what of their technical experience? While Veracity brings in a lot of smart guys, Broadweave itself has zero experience delivering video in Traverse Mountain and has fewer than 30 video customers in Sienna Hills, a subdivision sitting in one of the areas hardest-hit by the subprime mortgage meltdown. Integrating the Veracity team, one that offers very limited video experience, will take months and result in major system hiccups. They will also have to attempt to integrate city employees from the NOC, many of whom are highly opposed to the transaction and have negative opinions of their soon-to-be co-workers. Replacing these highly-skilled employees will be very expensive and have a strong negative impact on network operations, especially in Utah's tight labor market.
The option you are presented with is a terrible one, to spend 19 years financing the operations of a dishonest company with big dreams and small execution that plans to acquire a basket full of technical and HR problems. I urge you in the strongest possible terms to reject this rent-to-own arrangement and find some other way to resolve the problems behind iProvo.
If you have any additional questions, I would be more than happy to answer them and would request that this letter be entered in as part of the public record on behalf of proponents of open municipal fiber optic networks.